Globalization of Healthcare
Globalization of Healthcare Globalization in healthcare is a topic that has been the subject of many debates worldwide. While practically the entire world is becoming a global village due to globalization, the healthcare industry was considered to be invulnerable to this trend. This was attributed to the fact that healthcare is a service industry, where service is delivered on area of purchase. However many developments not only in the healthcare industry but in the entire economical sphere as a whole have seen the aspects of globalization.
As a result globalization in the healthcare industry is a common phenomenon in the contemporary world. As the healthcare industry across global boundaries becomes increasingly intertwined, outsourcing is becoming the norm rather than the exception (CNBC). This globalization in healthcare has been driven by several factors, which have several impacts. The goal of this paper therefore is to explore globalization in the healthcare industry. To achieve this goal, the context of this paper will be divided into two sections and each section will have several subsections.
The first section is an analysis of the given case study. After reading the case study, this section will explore the facilitating developments that have driven healthcare to start globalizing, benefits and losers of globalization in healthcare, as well as the risks associated with globalization and assess ways of mitigating this risk in the healthcare sector. The second section will be a detailed account of how Manulife Financial Company can take advantage of the globalization trend in healthcare.
The paper will then be concluded by a summary of events. Section One: Case Study Analysis Q1. Facilitating Developments that have allowed Healthcare to Start Globalizing. Globalization in healthcare is nowadays a current phenomenon in the United States. The following factors influenced the need for globalization of healthcare. ? Shortage of medical specialists. United States currently has a shortage of medical specialists mostly radiologists. For example, the demand for radiologists exceeds by far the supply of radiologists from medical schools.
Given this deficiency and the underlying need of reading and translating x-rays in real time, outsourcing to India began to take place. ? Take advantage of time differences in different zones. The use of Indian radiologists was beneficial to the country as it ensured efficient time delivery. This is because American doctors could send x-rays to their Indian counterparts and receive translations in the morning due to the time time differences. ? Lower costs of medical services in other countries as compared to the higher costs in the United States.
Outsourcing of medical care or medical tourism, as it is known in some circles, helps patients deal with financial constraints and allows the patients to get the same medical services for a lower price. For example in the case study it is illustrated that David Jones, a Texan opted to get his triple bypass surgery in New Delhi where it cost him $16,000. If the surgery was done in America, Jones would have a much higher cost of $250,000. These statistics show that healthcare in America is quite expensive when compared to other nations. Many Americans have Insurance issues with over forty five million of the population being uninsured. Another larger percentage being underinsured. With respect to the above named high medical costs in America it is understandable why Americans opt to get medical treatment in other nations. It is worth noting that regardless of travel expenses, international medical treatment still has a lower cost. ? Emergence of high quality private hospitals abroad in developing nations like Singapore or India. Another factor that comes in to play are the high quality hospitals additional to the low charge for the medical services. On basis of the high medical costs in America combined with the expensive medical insurance of employees, employers continually prefer to outsource for medical services. ? High medical costs have also made some insurance companies seek for offshore medical services that exceed twenty thousand dollars. Q2. Benefits and Losers of Healthcare Globalization Globalization is changing the healthcare sector rapidly and radically through the circulation of medical goods and services. Therefore, the core of globalization is on basis of multilateral agreements between nations.
However the very nature of globalization and the agreements between the developed country and developing and underdeveloped country means that the process benefits the former while the latter often loses or gets a meager trickle down from the benefits. For example in the case study it is established that due to the shortage of radiologists in America, radiologists are often expensive and take home a large paycheck of approximately $400,000. Outsourcing to Indian radiologists would not only reduce the workload of the American radiologists but also cut costs.
Cost cutting would be achieved through cheaper professional fees for the Indian radiologist who gets approximately a tenth of what their American counterpart receives. This means that globalization in this sense benefits the American population and professionals, while the Indians lose. However, globalization could also benefit the developing or underdeveloped nation like India through these practices. For example the earnings that the Indian radiologist gets, though minimal in comparison to their American counterpart, account for a large part of the Indian radiologists finances.
Additionally when patients from the developed nations go to the developing nations in search for treatment, they bring in foreign exchange. Thus, globalization of healthcare could also benefit the outsourced nation through liberalization (Segouin, Hodges and Brechat). For example with insures like Aetna using the services of Singaporean medical facilities, Singapore gets the opportunity of adopting the processes and standards of healthcare in America. The outsourced company benefits economically. The developing nation or the outsourced nation in this case might both lose.
Outsourcing of medical specialists, for example radiologists in India could result in a drain of radiologists from the Indian public health system who prefer to work for the Americans to reap on the higher pay achieved through currency exchange. It can be concluded, while there are losers and beneficiaries in globalization of healthcare, all the parties achieve some sort of benefit in the process (Huynen, Martens and Hilderink). Q3. Risks Associated with Globalization of Healthcare and Mitigation Strategies Globalization of healthcare has many inherent risks as shown below.
However as shown above, globalization of healthcare has many benefits and as such mitigation strategies of dealing with these risks. For example; ? Transfer of microbes and other vectors. Globalization has made the world flatter and this has consequently increased the traffic of microbes. Medical tourists who travel from one country to another put forward a risk of transferring diseased microbes. For example, when Peru had a cholera outbreak in the ninety’s, globalization of healthcare turned this outbreak into a continental epidemic (Huynen, Martens and Hilderink).
Globalization of healthcare also leads to the transfer of other vectors like harmful lifestyle changes for example smoking. While America as a country has regulations for tobacco companies, most of the outsourced nations don’t. To mitigate the above risks, national policies that are put in place should be coupled with global policies that will control the globalization of healthcare for instance by a World Health Organization (Pang and Guindon). ? Restrictions of drugs. America may have some restrictions for its consumers to access certain prescription drugs.
Globalization of healthcare gives this consumer access to these drugs when they outsource for medical services. To avoid this risk, local authorities should collaborate with the outsourced medical services (Frenk and Gomez-Dantes). ? Risk of misuse of personal health information (Pang and Guindon). To avoid a risk, analysis of the outsourced medical services should be conducted to ensure that information is kept secure. Section Two: Manulife Financial Company and Globalization of Healthcare Phase A: Introduction to Manulife Financial Company
Manulife Financial is an International financial services group that has been running for the last one hundred and twenty five years. The group is headquartered in Canada as Manulife Financial where its principal operations are carried out but has several subsidiaries in Asia and the United States. In the United States the company is known as John Hancock. The company provides financial services for example pensions, group benefits, health insurance, long-term care services, mutual funds and life insurance (Manulife Financial ). The company also offers reinsurance services.
The context of this paper will however concentrate on their health insurance and how the company can take advantage of the globalization of healthcare trends. It is worth noting that Manulife envisions being one of the leading organizations worldwide. The world is rapidly globalizing and if Manulife has to achieve its vision it has to take advantage of the globalization of healthcare. Phase B: Analysis As illustrated from the case study, globalization in healthcare is becoming a common phenomenon especially in the United States due to the high medical costs, shortage of medical experts and insurance issues.
Manulife Financial through John Hancock in the United States can take advantage of this status quo and reap the benefits of globalization in healthcare. Globalization of their healthcare services will not only be of benefit to Manulife Financial Company in terms of their strategic goal of international presence but also to their clients who will benefit from cheaper high quality medical services. To understand how Manulife Financial can make their healthcare programs take advantage of the globalization in the healthcare sector, it is imperative to conduct a SWOT analysis of the firm. Strengths |Weaknesses | |Market leadership in Canada and other countries |Their asset base is mainly made of commercial loans causing a lot of | |Diversified asset base as they have low sensitivity to interest rates |uncertainty due to delinquency | | |Negative net income from goodwill impairment | |Opportunities |Threats | |Potential for acquisitions that will increase market share |Insurance is characterized by volatile market conditions | |Resetting of federal estate tax made many people seek insurance from |High taxes | |private companies. | | Other Analyses: ? Insurance industry has high entry barriers which would benefit Manulife Financial ? The company offers a lot of substitute products ensuring customers are satisfied and this could be improved by globalization aimed at cost cutting ? The company faces competition from organizations like prudential financial, Metlife inc. and ING Group.
Off shoring healthcare will reduce operational costs for Manulife enabling it to compete effectively (University of Oregon Investment Group ). Phase C: How Globalization of Healthcare can help Manulife Financial It has been established that Manulife Financial envisions being a leading multinational company providing financial services. An analysis of Manulife Financial has established that the company is well placed to achieve this vision given their asset base, the demand of their products and their decentralization of operations. However the company’s success is threatened by intense rivalry, high taxes, volatile market conditions and uncertainty in their asset base.
To mitigate these threats while at the same time to reap more benefits, it is recommended that Manulife Financial outsource for medical services. Through globalization of healthcare the company will cut down on operational cost and also increase on their competitiveness by offering premium services at subsidized rates. The company can do this through many ways. For Example by collaborating with their Asian office, the company can opt to treat their patients in other countries but Canada and United States. This could be done by for instance putting a limit on treatments that exceed a certain amount. Treatments that exceed this amount can be done in cheaper countries.
The company can also collaborate with local hospitals to outsource for medical professionals. For instance a patient in Nevada can have his x-ray results sent to India or Singapore for interpretation so as to reduce the high cost of interpreting in the United States. Globalization of their health insurance is therefore very beneficial to Manulife Financial as it will benefit the company and its customers. Works Cited CNBC. “The Globalization of Health Care. ” 26 October 2009. CNBC. 16 February 2012 . Frenk, Julio and Octavio Gomez-Dantes. “Globalisation and the challenges to health systems. ” Pubmed (2002). Huynen, Maud, Pim Martens and Henk Hilderink. The health impacts of globalisation: a conceptual framework. ” 3 August 2005. Globalization and Health . 16 February 2012 . Manulife Financial . “About Manulife Financial. ” n. d. . Manulife Financial. 16 February 2012 . Pang, Tikki and Emmanuel Guindon. “Globalization and risks to health. ” 2004. Segouin, Christophe, Brian Hodges and Pierre-Henri Brechat. “Globalization in health care: is international standardization of quality a step toward outsourcing? ” International Journal of Quality Health (2005): 277-279. University of Oregon Investment Group . “Manulife Financial Corporation . ” 11 March 2011. University of Oregon Investment Group . 15 February 2012 .